A new study reveals that despite the increasing importance of digital technology, Aussie small businesses are less likely to invest in, use, earn from or offer customers the use of digital technologies than their Asia-Pacific counterparts.
In a survey by CPA Australia of 4227 businesses in 11 markets, Australian businesses were the least likely to begin or increase online sales during COVID-19, use social media for business, invest in technology, profit from their investment in technology, or review cyber-security.
In addition, Australian small businesses were the second least likely to earn revenue from online sales and third least likely to offer customers the choice of digital payment technologies.
Overall, only 22.3 per cent of Australian small businesses grew last year – the second-lowest result of any market surveyed. Only 8.3 per cent of Australian small businesses added employees – the lowest number in any of the countries involved in the research.
Over two thirds, 36.1 per cent, of Australian small businesses reported they made no “major change” in response to the pandemic, the highest result of any of the markets surveyed. These businesses did not decide to access government support, negotiate rent reductions or loan holidays, delay taxation payments or reduce capital expenditure.
“Other markets made major in-roads on digital transformation during the pandemic,” CPA Australia Chief Executive Officer, Andrew Hunter, said. “Clearly, Australian small businesses need more help than they’re getting to leave the digital dark ages behind.
“There is a clear link between innovation and performance. Our survey shows that growing businesses are more likely to use new technologies, e-commerce and social media. These are areas in which Australian small businesses performed poorly,” Hunter added.
“This digital divide will make Australia’s road to economic recovery longer and tougher than it needs to be. If Australian small businesses don’t transform, sales will go to more innovative competitors overseas.”
Australian small businesses expect to fare better in 2021, however, they may still underperform other Asia-Pacific businesses. Only 41.4 per cent of Australian small businesses expect to grow this year compared with the survey average of 60.8 per cent. Only 13 per cent expect to increase employees numbers, compared with the survey average of 35 per cent. Only 6.7 per cent have said that they will introduce a product, process or service that is unique to their market or the world in 2021, compared with 23 per cent in other markets.
Hunter urged the government to show greater support for digital transformation.
“While businesses should play an active role in digital transformation, the government needs to play a bigger role in helping businesses manage this change,” Hunter said. “Ad hoc financial support for digital transformation isn’t sufficient. There needs to be a significant commitment of public funding to help Australian small businesses transform.”
CPA Australia also called on the government to invest in improving the digital capability of small businesses in our 2021-22 Federal Budget submission.
“Given how far behind Australian businesses are, the level of investment needed to bridge the digital divide is quite substantial,” Hunter said. “For example, last year Singapore announced an AU$325 million program to support local businesses with digital transformation.”
